The S&P 500 Nears Its 50-DMA

I’m struck by how placid this market has been. The indexes just aren’t doing much of anything. As I mentioned before, the chart-watching crowd takes that as a good sign since the market hasn’t done an immediate U-turn after a nice rally.

I would think some traders would have been rattled by the news of the resignation of Italy’s Prime Minister but that hasn’t happened (although the Italian bond market wasn’t pleased). On Friday, the S&P 500 closed at its highest level since the election but it was just a hare breath below the 50-day moving average. It’s been seven weeks since the index last closed above its 50-DMA.

Analysts on Wall Street now expect Q4 earnings for the S&P 500 of $25.62 which is down from $28.32 at the beginning of the year (these are index-adjusted numbers). For Q1, the Street now expects $26.41 which would still be an all-time record, but it’s down more than $1 since the middle of the year.

I used to think the S&P 500 could break $100 in earnings this year but it looks like we’re going to fall just short. The current estimate is for $99.68. For next year, the Street expects $113.26. In 2006, the index made $87.72. That was the all-time high until last year.

For dividends, I think the S&P 500 will be able to pay out more than $30 in dividends this year. For last year, it was $26.43.

Posted by on December 10th, 2012 at 2:16 pm

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